On Friday, US bank stocks experienced a broad rally. As of the latest report, Goldman Sachs (GS.US) and Morgan Stanley (MS.US) saw increases of over 3%, while JPMorgan Chase (JPM.US) and Citigroup (C.US) rose more than 2%. Bank of America (BAC.US) increased by nearly 2%.

Recent reports indicate that the Federal Reserve has presented a revised set of final rules for the Basel III Accord to other US regulators, which will significantly ease capital requirements for large Wall Street banks. Some officials estimate that the new proposal will reduce the overall capital increase for most large banks to between 3% and 7%, a figure that is well below the proposed 19% increase put forth in 2023 and the 9% increase from last year's compromise version. For banks with significant trading business portfolios, the capital increase could be even smaller or possibly decline.

Morgan Stanley noted that by the second quarter of 2025, large banks collectively hold $157 billion in excess capital. A rough calculation indicates that even with a 7% increase in capital requirements, large banks would still retain at least $146 billion in excess capital. As subsequent capital rules (such as GSIB surcharges, SLR, and transparency in stress testing) are adjusted, the capital adequacy of banks may continue to improve. Morgan Stanley also added that the reduction in capital requirements would most benefit Goldman Sachs among the banks it covers, particularly those with large trading-oriented investment portfolios.